Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 07, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | EMPIRE RESORTS INC | |
Entity Central Index Key | 906,780 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,735,339 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 16,743 | $ 10,380 |
Restricted cash | 984 | 693 |
Accounts receivable, net | 4,649 | 1,273 |
Inventory | 1,834 | 174 |
Prepaid expenses and other current assets | 5,618 | 3,376 |
Total current assets | 29,828 | 15,896 |
Property and equipment, net | 661,219 | 26,863 |
Capitalized Development Projects costs | 9,368 | 566,797 |
Restricted cash and investments for Development Projects | 29,458 | 136,431 |
Intangible asset, net | 48,371 | 51,000 |
Cash collateral for deposit bond | 0 | 35,000 |
Other assets | 3,471 | 251 |
Total assets | 781,715 | 832,238 |
Current liabilities: | ||
Accounts payable | 9,299 | 2,686 |
Current portion of long-term debt | 26,143 | 14,588 |
Accrued Development Projects costs | 37,427 | 71,712 |
Accrued expenses and other current liabilities | 20,948 | 7,320 |
Total current liabilities | 93,817 | 96,306 |
Long-term debt, net of current portion | 462,744 | 455,148 |
Other long-term liabilities | 7,540 | 9,463 |
Total liabilities | 564,101 | 560,917 |
Commitments and Contingencies | ||
Stockholders’ equity: | ||
Common stock | 327 | 326 |
Additional paid-in capital | 576,772 | 572,342 |
Accumulated other comprehensive loss | (128) | (315) |
Accumulated deficit | (359,357) | (301,032) |
Total stockholders’ equity | 217,614 | 271,321 |
Total liabilities and stockholders’ equity | 781,715 | 832,238 |
Series B | ||
Stockholders’ equity: | ||
Preferred stock | $ 0 | $ 0 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (shares) | 32,735,000 | 32,560,000 |
Common stock, shares outstanding (shares) | 32,735,000 | 32,560,000 |
Series B | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, per share liquidation value (usd per share) | $ 29 | $ 29 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (shares) | 44,000 | 44,000 |
Preferred stock, shares outstanding (in shares) | 44,000 | 44,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Gross revenues | $ 49,136 | $ 18,287 | $ 82,658 | $ 33,408 |
Less: Promotional allowances | 0 | (1,101) | 0 | (1,453) |
Net revenues | 49,136 | 17,186 | 82,658 | 31,955 |
Operating costs and expenses: | ||||
Selling, general and administrative | 16,949 | 5,125 | 25,033 | 9,428 |
Development Projects | 537 | 4,416 | 11,632 | 8,685 |
Amortization of gaming license | 1,577 | 0 | 2,629 | 0 |
Depreciation | 7,805 | 389 | 12,461 | 725 |
Total operating costs and expenses | 71,530 | 24,016 | 123,943 | 45,141 |
Loss from operations | (22,394) | (6,830) | (41,285) | (13,186) |
Interest expense | (15,057) | (6,164) | (17,453) | (11,713) |
Interest income | 153 | 1,078 | 529 | 1,532 |
Loss before income taxes | (37,298) | (11,916) | (58,209) | (23,367) |
Income tax provision | 0 | 0 | 0 | 0 |
Net loss | (37,298) | (11,916) | (58,209) | (23,367) |
Unrealized income (loss) on Interest Rate Cap | 72 | (299) | 187 | (390) |
Dividends on preferred stock | (32) | (32) | (64) | (64) |
Net loss applicable to common stockholders | $ (37,330) | $ (11,948) | $ (58,273) | $ (23,431) |
Weighted average common shares outstanding, basic (shares) | 32,663 | 31,029 | 32,601 | 31,031 |
Weighted average common shares outstanding, diluted (shares) | 32,663 | 31,029 | 32,601 | 31,031 |
Loss per common share, basic (usd per share) | $ (1.14) | $ (0.39) | $ (1.79) | $ (0.76) |
Loss per common share, diluted (usd per share) | $ (1.14) | $ (0.39) | $ (1.79) | $ (0.76) |
Comprehensive loss | $ (37,226) | $ (12,215) | $ (58,022) | $ (23,757) |
Gaming | ||||
Revenues: | ||||
Gross revenues | 39,798 | 16,230 | 68,325 | 29,123 |
Operating costs and expenses: | ||||
Cost of goods and services sold | 34,462 | 11,817 | 55,810 | 21,645 |
Racing | ||||
Revenues: | ||||
Gross revenues | 1,194 | 1,237 | 2,558 | 2,723 |
Operating costs and expenses: | ||||
Cost of goods and services sold | 2,017 | 1,160 | 3,725 | 2,459 |
Food and beverage | ||||
Revenues: | ||||
Gross revenues | 4,569 | 589 | 7,141 | 1,098 |
Operating costs and expenses: | ||||
Cost of goods and services sold | 6,031 | 1,029 | 9,582 | 2,038 |
Room | ||||
Revenues: | ||||
Gross revenues | 1,775 | 0 | 2,459 | 0 |
Operating costs and expenses: | ||||
Cost of goods and services sold | 2,103 | 0 | 2,960 | 0 |
Other | ||||
Revenues: | ||||
Gross revenues | 1,800 | 231 | 2,175 | 464 |
Operating costs and expenses: | ||||
Other | $ 49 | $ 80 | $ 111 | $ 161 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows provided by (used in) operating activities: | ||
Net loss | $ (58,209) | $ (23,367) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 12,461 | 725 |
Amortization of gaming license | 2,629 | 0 |
Amortization of debt issuance costs | 1,714 | 2,578 |
Net recovery of doubtful accounts | (41) | 0 |
Non-cash interest expense | 0 | 1,739 |
Loss on disposal of property and equipment | 0 | 39 |
Stock-based compensation | 1,449 | 1,472 |
Warrants issued in legal settlement | ||
Accounts receivable | (3,335) | 23 |
Inventories | (1,661) | (22) |
Prepaid expenses and other current assets | (2,240) | 1,061 |
Accounts payable | 6,613 | 942 |
Accrued expenses and other current liabilities | 12,996 | (948) |
Net cash used in operating activities | (27,624) | (15,758) |
Cash flows provided by (used in) investing activities: | ||
Purchase of property and equipment | (426) | (1,734) |
Capitalized Development Projects costs | (123,249) | (117,247) |
Repayment of equipment loans | 35,000 | (20,000) |
Net change in investments for Development Projects | 87,405 | (275,755) |
Other | 13 | 9 |
Net cash used in investing activities | (1,257) | (414,727) |
Cash flows provided by (used in) financing activities: | ||
Proceeds from related party equity contribution | 0 | 32,000 |
Series B Preferred Stock dividend payment | (64) | (64) |
Proceeds from exercise of stock options and option matching rights | 50 | 0 |
Payment of debt issuance costs and Interest Rate Cap fees | (277) | (22,427) |
Other payments | (1,455) | (275) |
Net cash provided by financing activities | 15,967 | 451,105 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (12,914) | 20,620 |
Cash, cash equivalents and restricted cash, beginning of period | 53,055 | 38,474 |
Cash, cash equivalents and restricted cash, end of period | 40,141 | 59,094 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 26,701 | 17,145 |
Non-cash investing and financing activities: | ||
Accrued Development Projects costs | 37,427 | 61,940 |
Term Loan Facility, Term B Loan [Member] | ||
Cash flows provided by (used in) financing activities: | ||
Proceeds from issuance of debt | 0 | 441,871 |
Term Loan Facility, Term A Loan [Member] | ||
Cash flows provided by (used in) financing activities: | ||
Proceeds from issuance of debt | 9,000 | 0 |
Fifth Third Revolver [Member] | ||
Cash flows provided by (used in) financing activities: | ||
Proceeds from issuance of debt | 15,000 | 0 |
Term Loan Facility, Term Loans [Member] | ||
Cash flows provided by (used in) financing activities: | ||
Repayment of loans | (2,875) | 0 |
Equipment Loans [Member] | ||
Cash flows provided by (used in) financing activities: | ||
Repayment of loans | $ (3,412) | $ 0 |
Organization and Nature of Busi
Organization and Nature of Business | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business Overview Empire Resorts, Inc. (“Empire,” and, together with its subsidiaries, the “Company,” “us,” “our” or “we”) was organized as a Delaware corporation on March 19, 1993, and since that time has served as a holding company for various subsidiaries engaged in the hospitality and gaming industries. Our indirect, wholly-owned subsidiary, Montreign Operating Company, LLC, doing business as Resorts World Catskills ("Montreign Operating"), owns and operates Resorts World Catskills, a casino resort (the "Casino"), which opened to the public on February 8, 2018. The Casino is located in Sullivan County, New York approximately 90 miles from New York City. Montreign Operating is the sole holder of a gaming license (a "Gaming Facility License") issued by the New York State Gaming Commission ("NYSGC") in the Hudson Valley-Catskill region, which consists of Columbia, Delaware, Dutchess, Greene, Orange, Sullivan and Ulster counties in New York State. In addition to the Casino, Empire Resorts Real Estate I, LLC ("ERREI") and Empire Resorts Real Estate II, LLC ("ERREII" and, together with Montreign Operating and ERREI, the "Project Parties"), each of which is a wholly-owned subsidiary of Montreign Operating, are developing an entertainment village (the "Entertainment Project") and a golf course (the "Golf Course Project" and, together with the Casino and the Entertainment Project, the "Development Projects"), respectively, at the site of a four-season destination resort in Sullivan County, New York. Through our wholly-owned subsidiary, Monticello Raceway Management, Inc. ("MRMI"), we own and operate Monticello Casino and Raceway, which began racing operations in 1958 in Monticello, New York, which is proximate to the Casino. Monticello Casino and Raceway currently features a video gaming machine ("VGM") and harness horseracing facility. We also generate racing revenues through pari-mutuel wagering on the running of live harness horse races, the import simulcasting of harness and thoroughbred horse races from racetracks across the country and internationally, and the export simulcasting of our races to offsite pari-mutuel wagering facilities. Recent Events The Entertainment Project and Golf Course Project ERREII has entered into a construction manager agreement with Arc Building Partners, which is a standard construction manager agreement with normal and customary terms, and addresses, among other things, the guaranteed maximum price of approximately $33 million for the Entertainment Project, completion commitments and participation by minority-owned and woman-owned business enterprises ("MWBE"). The Entertainment Project will consist of a hotel with approximately 100 hotel rooms, as well as dining, entertainment and retail offerings. Construction of the hotel began in April 2018 and is expected to be open to the public in December 2018. ERREI anticipates entering into a construction contractor agreement with Heritage Links, which is a standard contractor agreement with normal and customary terms, related to the construction of the Golf Course Project, at a cost of approximately $19.4 million. The Company anticipates construction to begin during the summer of 2018 and anticipates the golf course will be open for play during the summer of 2019. Sports Betting The Upstate New York Gaming and Economic Development Act ("Gaming Act") provides, among other things, that sports betting at the gaming facilities shall be unlawful unless there has been a change in federal law authorizing such activity or upon ruling of a court of competent jurisdiction that such activity is lawful. In May 2018, the Supreme Court of the United States decided that the Professional and Amateur Sports Protection Act of 1992, which effectively outlawed sports betting nationwide, was unconstitutional. Therefore, upon the enactment of relevant regulations by the NYSGC, the Company may implement sports betting as part of the gaming experience at the Casino. In addition, the Company may pursue opportunities in online sports gambling and mobile betting upon their legalization in New York State. The Company is in discussions with various industry participants about the operation of a sports book at the Casino and broader collaboration on the implementation of online platforms. We may pursue these opportunities through direct investments, acquisitions, joint venture arrangements and other transactions. We can provide no assurance that we will successfully identify such opportunities or that, if we identify and pursue any of these opportunities, any of them will be consummated. Basis for Presentation The condensed consolidated financial statements and notes as of June 30, 2018 and December 31, 2017 and for the three- and six-month periods ended June 30, 2018 and June 30, 2017 include the accounts of Empire and its subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared under the rules and regulations of the Securities and Exchange Commission ("SEC") applicable for interim periods, and therefore do not include all information necessary for complete financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Our financial statements require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent liabilities. Actual amounts could differ from those estimates. These condensed consolidated financial statements reflect all adjustments (consisting primarily of normal recurring accruals) which are, in the Company’s opinion, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for our interim periods may not be necessarily indicative of the results of operations that may be achieved for the entire year. Liquidity and Capital Resources The accompanying consolidated financial statements have been prepared on a basis that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Historically and prospectively, our primary sources of liquidity and capital resources have been, and will continue to be, cash generated from operations, borrowings from banks and proceeds from the issuance of debt and equity securities. Based on our current level of operations and the continuing ramp-up of amenities at the Casino and expenditures for the Development Projects over the next 12 months, we may need to raise additional debt or equity financing to supplement the cash generated from operations, cash on hand, and the amounts available under our principal debt arrangements, to meet our anticipated debt service requirements, make capital expenditures and satisfy working capital needs for the next 12 months. We cannot be certain that our business will generate sufficient cash flow from operations, that our anticipated earnings from the Casino will be realized, or that future borrowings will be available under our existing debt arrangements or otherwise to enable us to service our indebtedness, make anticipated capital expenditures and satisfy working capital needs. As a result, we may need to raise additional capital or incur additional indebtedness, including from our largest stockholder or by issuing securities from our Shelf Registration Statement (as defined below), which has a current availability of approximately $333 million , to finance our plans for growth and general corporate purposes. Our future operating performance and our ability to service our debt will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. See “Risk Factors” in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2017 for a discussion of the risks related to our liquidity and capital structure. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Reclassifications Certain amounts in the accompanying consolidated financial statements for the 2017 period have been reclassified to conform to presentation in the 2018 period, most notably amortization of debt issuance costs has been included within interest expense on the Condensed Consolidated Statement of Operations. Revenue recognition As described below, the Company adopted the provisions of new accounting standards and updates as codified in the Accounting Standards Codification (ASC) Topic 606 regarding revenue recognition. The Company adopted this guidance as of January 1, 2018 using the modified retrospective approach. Under the modified retrospective approach, amounts presented as of December 31, 2017 and for the three-month and six-month periods ended June 30, 2017 have not been adjusted to reflect the impact of the ASC Topic 606. This approach does not significantly impact the comparability of the 2018 and 2017 amounts. The promotional allowances recorded in 2017 are no longer presented in 2018 under ASC Topic 606. The adoption of the provisions of ASC 606 resulted in an increase to “Other accrued liabilities” of $54,000 and “Accumulated deficit” of $54,000 at January 1, 2018. These increases were exclusively the result of remeasuring the loyalty program liability from a deferred cost model to a deferred revenue model. This change only impacts MRMI, since the Casino did not commence operations until February 8, 2018. The Company’s patron transactions primarily consist of gaming wagers, hotel room and food and beverage purchases. The transaction price for gaming wagers is the difference between gaming wins and losses, not the total amount wagered. The transaction price for hotel room and food and beverage purchases is the net amount collected from the patron for such goods and services. Hotel room and food and beverage goods and services have been determined to be separate, stand-alone transactions and the transaction price for such goods or services is recorded as revenue as they are transferred to the patron over the duration of the patron’s stay at the hotel or when the Company provides the food and beverage services. In the case of a hotel stay involving multiple days, the total transaction price of the stay is recognized on a straight-line basis as the reservation for total days of stay is non-cancelable by the patron. The Company collects advanced deposits from hotel patrons for future reservations representing obligations of the Company until the room stay is provided to the patron. Gaming wagers by patrons who are members of our loyalty programs represent two performance obligations of the Company. Patrons who are members of our loyalty programs earn loyalty points for gaming wagers. Points awarded under our loyalty programs are given to members based on their gaming play and the promise to provide points to members is required to be accounted for as a separate performance obligation. The Company applies a practical expedient by accounting for gaming wagers on a portfolio basis, as such wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to each individual patron. For purposes of allocating the transaction price when loyalty points are earned, the Company allocates an amount to the loyalty point liability based on the stand-alone selling price ("SSP") of the points earned, which is determined by the value of a point that can be redeemed for a hotel room or food and beverage services. An amount is allocated to the gaming wager performance obligation using the residual approach as the stand-alone price for wagers is highly variable and no set established price exists for such wagers. The allocated revenue for gaming wagers is recognized when the wagers occur because all such wagers settle immediately. The loyalty point liability amount is deferred and recognized as revenue when the patron redeems the points for a hotel room stay or for food and beverage services and such goods or services are provided to the patron. Prior to the adoption of ASC 606, we determined our liability for unredeemed points based on the estimated costs of services or merchandise to be provided and estimated redemption rates. Additionally, outside of our loyalty programs and at our discretion, we offer our patrons complimentary goods and services, primarily food and beverage and hotel room stays. Such complimentaries are provided in conjunction with revenue-generating gaming activity and are largely provided to entice contemporaneous and future revenue-generating gaming activities. We allocate a portion of the transaction price for gaming wagers we receive from such patrons to the complimentary goods and services provided to such patrons using the residual approach. This allocation is based on the estimated SSP of the underlying goods and services provided, which are determined based on observed SSP we receive for selling such goods and services. Hospitality Revenues: Food and beverage revenues, and room revenues include (i) revenues generated from transactions with patrons for such goods and/or services, (ii) revenues recognized through the redemption of points from our loyalty programs for such goods and/or services, and (iii) revenues generated as a result of providing such goods and/or services on a complimentary basis in conjunction with gaming activities. Food and beverage revenues and room revenues are recognized when goods are delivered and services are performed. In general, performance obligations associated with these transactions are satisfied at a point-in-time, but may also be satisfied over a period of time, which is typically over the course of a patron’s stay. Advance deposits on rooms are reflected as a performance obligation liability until the goods and/or services are provided to the patron. The Company's performance obligation liabilities are included in “Accrued expenses and other accrued liabilities” in our unaudited condensed consolidated balance sheets. Racing Revenues: Racing revenues include revenue earned from pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks. Some elements of racing revenue from Off-Track Betting Corporations (“OTBs”) are recognized as collected, due to uncertainty of receipt and timing of payments. Other Revenues: Other revenues primarily include commissions received on ATM transactions and cash advances, as well as lottery tickets, which are recorded on a net basis as the Company represents the agent in its relationship with the third-party service providers. Other revenues also include the sale of retail goods, which are recognized at the time the goods are delivered to the customer. Subsequent to the adoption of ASC 606, complimentary food and beverage revenues and room revenues are included in food and beverage revenues, room revenues, and other revenues, with a corresponding decrease to gaming revenues, in the unaudited condensed consolidated statements of operations. See “Recent Accounting Pronouncements” for further information regarding the adoption of ASC 606. Complimentary food and beverage revenues, and complimentary room revenues for the three-month and six-month periods ended June 30, 2018 and 2017, respectively, were as follows: Three Months Ended Six Months Ended 06/30/2018 06/30/2017 06/30/2018 06/30/2017 (in thousands) (in thousands) Complimentary food and beverage revenues $2,218 $127 $3,234 $293 Complimentary room revenues 786 — 950 — The Company’s performance obligation related to its loyalty point obligation is generally completed within one year, as a patron’s loyalty point balance is forfeited after six months of inactivity, as defined in the loyalty programs. The Company’s liability for its loyalty point performance obligations was $1.6 million and $0.3 million at June 30, 2018 and December 31, 2017, respectively. Loyalty points are generally earned and redeemed continuously over time. Cash, cash equivalents and restricted cash Cash and cash equivalents include cash on hand, demand deposits and certificates of deposit with original maturities of three months or less at acquisition. The Company maintains significant cash balances with financial institutions, which are not covered by the Federal Deposit Insurance Corporation. The Company has not incurred any losses in such accounts and believes it is not exposed to any significant credit risk on cash. The Company has several types of restricted cash accounts. These restrictions are in accordance with the NYSGC regulations. In addition, at June 30, 2018, the Company had restricted cash of $29.5 million from the proceeds of the Term Loan Facility held in the lender-controlled accounts pursuant to the Term Loan Facility. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows: June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 (in thousands) Cash and cash equivalents $16,743 $10,380 $6,449 $11,012 Restricted cash 984 693 924 1,078 Restricted cash for Development Projects 22,414 41,982 51,721 26,384 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $40,141 $53,055 $59,094 $38,474 Restricted cash and investments for Development Projects Restricted cash and investments for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At June 30, 2018, restricted cash and investments for Development Projects of $29.5 million was comprised of cash and cash equivalent balances of approximately $22.4 million and short-term investments maturing within one year of approximately $7.0 million . At June 30, 2018, short-term investments were comprised of commercial paper of approximately $3.5 million and U.S. Treasury notes of $3.5 million . At December 31, 2017, restricted cash and investments for Development Projects of $136.4 million was comprised of cash and cash equivalent balances of approximately $41.9 million and short-term investments maturing within one year of approximately $94.5 million . At December 31, 2017, short-term investments were comprised of commercial paper of approximately $59.4 million and U. S. Treasury notes of approximately $35.1 million , all with maturities of less than one year . The short-term investments are recorded at amortized cost, which approximates fair value due to their short-term nature. Accounts receivable Accounts receivable, net of allowances, are stated at the amount the Company expects to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectibility of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and the Company’s judgment of collectibility. In the normal course of business, the Company settles wagers for other racetracks and is exposed to credit risk. These wagers are included in accounts receivable. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recorded an allowance for doubtful accounts of approximately $130,000 and $171,000 at June 30, 2018 and December 31, 2017, respectively. Capitalized Interest Interest costs incurred in connection with the construction of the Casino and the Development Projects have been capitalized in the cost of the projects. Capitalization will cease when the Casino or the other Development projects are substantially complete or if development activity is suspended for an extended period of time. The Company capitalized $ $0.3 million and $5.9 million of interest charges during the three-month periods ending June 30, 2018 and June 30, 2017, respectively and $11.3 million and $9.4 million for the six-month periods ended June 30, 2018 and June 30, 2017, respectively. Other long-term liabilities The difference between our cash payments and straight-line rent on our land leases of $7.5 million and $8.3 million at June 30, 2018 and December 31, 2017, respectively, is included in other long-term liabilities. Common stock - loss per share The Company computes basic loss per share by dividing net loss applicable to common shares by the weighted-average common shares outstanding for the period. Diluted loss per share reflects the potential dilution of earnings that could occur if securities or contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three-month and six-month periods ended June 30, 2018 and and 2017 were the same. The following table shows the approximate number of common stock equivalents outstanding at June 30, 2018 and 2017 that could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share for the three-month and six-month periods ended June 30, 2018 and 2017, because their inclusion would have been anti-dilutive to the loss per common share: Outstanding at June 30, June 30, Unvested Restricted stock 73,000 148,000 Warrants 193,000 133,000 Restricted stock units ("RSUs") 158,000 55,000 Option Matching Rights 1,000 6,000 Options 12,000 19,000 Total 437,000 361,000 On August 19, 2009, the Company entered into an investment agreement (the "Investment Agreement") with Kien Huat Realty III Limited ("Kien Huat"), the Company's largest stockholder, pursuant to which Kien Huat purchased shares of common stock of the Company during the year ended December 31, 2009. Under the Investment Agreement, if any options or warrants outstanding at the time of the final closing under the Investment Agreement, or the first 200,000 options or warrants granted to directors or officers as of the final closing date under the Investment Agreement, are exercised, Kien Huat has the right to purchase an equal number of additional shares of common stock as are issued upon such exercise at the exercise price for the applicable option or warrant. The Company refers to these rights as the “Option Matching Rights”. The Option Matching Rights outstanding at June 30, 2018 expired in July 2018. Interest Rate Cap Agreement In February 2017, the Company entered into an interest rate cap agreement with Credit Suisse AG, International to limit its exposure to increases in interest rates on its Term B Loan (as defined below) from May 1, 2017 through February 28, 2018 and then for a portion of the balance of its Term B Loan through July 31, 2019 (the "Interest Rate Cap"). The Company paid $675,000 for the Interest Rate Cap. The cost of the Interest Rate Cap is amortized over its term as interest expense. The fair value of the Interest Rate Cap was $282,000 at June 30, 2018 and $251,000 at December 31, 2017, and is presented at fair value as "Other Assets" on the Condensed Consolidated Balance Sheet. The difference between the fair value and amortized cost is recorded as an adjustment to accumulated other comprehensive loss. Accumulated Other Comprehensive Loss As of June 30, 2018 and December 31, 2017, accumulated other comprehensive loss was $128,000 and $315,000 , respectively, and consisted solely of the fair value adjustment relating to the Interest Rate Cap. Fair value The Company follows the provisions of ASC 820, “Fair Value Measurement,” issued by the FASB for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The Company chose not to elect the fair value option as prescribed by the FASB for its financial assets and liabilities that had not been previously carried at fair value. The Company’s financial instruments are primarily comprised of current assets, restricted cash and investments, Interest Rate Cap, current liabilities and long-term debt. Current assets, investments and current liabilities approximate fair value due to their short-term nature. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. The fair value hierarchy of observable inputs used by the Company is broken down into three levels based on the source of inputs as follows: - Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. - Level 2 - Valuations based on inputs that are observable inputs and quoted prices in active markets for similar assets and liabilities. - Level 3 - Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. The following table presents the carrying amount, fair values and classification level within the fair value hierarchy of financial instruments measured or disclosed at fair value on a recurring basis: June 30, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Level of Fair Value Hierarchy Assets: (in thousands) Cash and cash equivalents $16,743 $16,743 $10,380 $10,380 Level 1 Restricted cash 984 984 693 693 Level 1 Interest Rate Cap 282 282 251 251 Level 2 Restricted cash and investments for Development Projects: Cash and cash equivalents 22,414 22,414 41,982 41,982 Level 1 Short-term investments 7,044 7,026 94,449 94,209 Level 2 Liabilities: Term B Loan, net of discount 442,474 448,589 443,161 449,749 Level 2 Term A Loan 7,250 7,250 — — Level 2 Bangkok Bank Loan 16,000 16,000 16,000 16,000 Level 3 Revolving Credit Facility 15,000 15,000 — — Level 2 Equipment loans 27,682 27,682 31,095 31,095 Level 3 Stock-based compensation The cost of all share-based awards to employees, including grants of employee stock options and restricted stock, is recognized in the financial statements based on the fair value of the awards at grant date. The fair value of stock option awards is determined using the Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the market price of Empire’s common stock on the date of grant. The fair value of share-based awards is recognized as stock-based compensation expense on a straight-line basis over the requisite service period from the date of grant. As of June 30, 2018, there was approximately $3.0 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company’s equity compensation plan. That cost is expected to be recognized over a period of three years . This expected cost does not include the impact of any future stock-based compensation awards. Income taxes The Company applies the asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates for the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Intangible Assets In accordance with ASC 350, Intangibles - Goodwill and Other, the Company amortizes intangible assets over their estimated useful lives unless the Company determines their lives to be indefinite. As a condition of the Gaming Facility License, the Company paid a license fee of $51 million on February 25, 2016. The term of the Gaming Facility License is 10 years from the date of grant; however, amortization did not commence until the Casino opened to the public in February 2018. Amortization has been recognized on a straight-line basis beginning in February 2018 and will continue until the license is up for renewal in 2026. The Company will assess the intangible asset for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Recent accounting pronouncements In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which provides guidance for accounting for leases. Under ASU 2016-02, the Company will be required to recognize the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard must be adopted using a modified retrospective approach and provides for certain practical expedients. Early adoption is permitted. The Company intends to adopt the standard on January 1, 2019 and apply the package of practical expedients available to it upon adoption. The Company continues to evaluate the effect that ASU 2016-02 will have on consolidated financial statements, but we expect that ASU 2016-02 will have a material effect on the condensed consolidated balance sheets as a result of the recognition of certain leases as right-of-use assets and lease liabilities. In November 2016, FASB issued ASU 2016-18, "Restricted Cash" Topic 230, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The Company adopted this standard on January 1, 2018 using the retrospective transition method. The impact of the new standard is that the Company's condensed consolidated statements of cash flows now present the change in a combined amount for both restricted and unrestricted cash and cash equivalents for all periods presented. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets The Company participated in the New York State Empire Zones real estate tax credit program for over 10 years. Under this program, the Company receives a refund for real estate taxes paid during the year, after the end of New York State's fiscal year. Beginning in 2014, the amount of the tax credit received was reduced by 20% each year until the tax credit ended for the Company on December 31, 2017. For the year ended December 31, 2017, the Company will receive a 20% refund for real estate taxes paid, equal to $270,000 , in the Spring of 2019. The outstanding real estate tax credits are included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheet at June 30, 2018 and December 31, 2017, and were approximately $270,000 and $814,000 , respectively. The increases in prepaid real estate taxes, advertising, gaming expenses and security deposits are directly related to the opening of the Casino during the current six-month period. Included in prepaid gaming expenses are $334,000 of supplies, such as playing cards, dice and chips. Prepaid expenses and other current assets, as presented on the balance sheet, are comprised of the following at June 30, 2018 and December 31, 2017: 6/30/2018 12/31/2017 (in thousands) Empire Zones real estate tax credit $ 270 $ 814 Prepaid real estate taxes 540 443 Prepaid insurance 203 327 Prepaid advertising 92 — Prepaid gaming expenses 1,568 74 Development escrow and refundable security deposit 1,292 780 Prepaid other 1,653 938 Total prepaid expenses and other current assets $ 5,618 $ 3,376 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment at June 30, 2018 and December 31, 2017 consists of the following: 6/30/2018 12/31/2017 (in thousands) Land $ 770 $ 770 Land improvements 1,759 1,759 Buildings 576,938 4,727 Building improvements 76,293 29,874 Furniture, fixtures and equipment 33,379 5,551 Construction in Progress 436 77 689,575 42,758 Less: Accumulated depreciation (28,356 ) (15,895 ) $ 661,219 $ 26,863 The $646.8 million increase in property and equipment was primarily due to the reclassification of capitalized Project Development costs to buildings, building improvements and furniture, fixtures and equipment during the six-month period ended June 30, 2018. At June 30, 2018, $9.4 million remains classified as capitalized Project Development costs reflecting the ongoing construction of the Development Projects. Depreciation expense was approximately $7.8 million and $0.4 million for the three-month periods ended June 30, 2018 and 2017 , respectively, and approximately $12.5 million and $0.7 million for the six-month periods ended June 30,2018 and 2017, respectively. The VGMs at Monticello Casino and Raceway are owned by the NYSGC and, accordingly, the Company's consolidated financial statements include neither the cost nor the depreciation of those devices. |
Development Projects Costs
Development Projects Costs | 6 Months Ended |
Jun. 30, 2018 | |
Project Development Costs [Abstract] | |
Development Projects Costs | Development Projects Costs Capitalized Project Development Costs At June 30, 2018 and December 31, 2017, total Capitalized Project Development costs incurred were approximately $9.4 million and $ 566.8 million , respectively. Total Capitalized Development Project costs at June 30, 2018 consisted of $8.4 million of construction costs, site development, contractor insurance, general conditions, architectural fees and construction manager fees, and approximately $1.0 million of professional service fees including legal and accounting fees. Total Capitalized Project Development costs at December 31, 2017 consisted of $560.2 million of construction costs, site development, contractor insurance, general conditions, architectural fees and construction manager fees, and approximately $6.6 million of professional service fees, including legal and accounting fees, and is reflected on the balance sheet as Capitalized Development Project costs. The Casino opened for business on February 8, 2018, after receiving an operating certificate from the NYSGC. As a result of the Casino opening for business, Capitalized Project Development costs relating to the Casino of approximately $630.1 million were reclassified as property and equipment for the Casino. Cash Collateral for Deposit Bond In February 2016 and June 2017, the Company deposited $15 million and $20 million , respectively, in performance bonds to guarantee the completion of the Development Projects. On December 28, 2017, the Company notified the NYSGC that it had expended 85% of the Company's required minimum capital investment in the Development Projects. On January 4, 2018, the NYSGC notified the Company that it had confirmed that the Minimum Capital Investment criteria had been met and the funds returned to the Company were deposited into a lender-controlled account for use towards Development Projects expenses. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued Development Projects costs at June 30, 2018 and December 31, 2017 were $37.4 million and $71.7 million , respectively, and were primarily comprised of amounts due to the Casino construction manager for costs incurred for the Development Projects, as well as amounts due to the architect and other vendors. The proceeds from the Term Loan Facility will be used to pay the accrued Development Project costs. Accrued expenses and other current liabilities, as presented on the condensed consolidated balance sheet, are comprised of the following at June 30, 2018 and December 31, 2017: 6/30/2018 12/31/2017 (in thousands) Liability for horseracing purses $ 1,449 $ 886 Accrued payroll 4,962 1,715 Deferred revenue - loyalty points 1,577 271 Liability to the NYSGC 1,662 1,507 Liability for local progressive jackpot 2,431 1,110 Accrued premium game leases 617 — Accrued professional fees 1,823 744 Accrued interest expense 378 14 Accrued utilities 656 81 Accrued other 5,393 992 Total accrued expenses and other current liabilities $ 20,948 $ 7,320 The increase in deferred revenue - loyalty points at June 30, 2018 of $1.3 million primarily reflects the increase in deferred revenues due to the increase in loyalty points earned by new customers as a result of the Casino opening. The liability to the NYSGC represents the amounts payable for taxes assessed by the NYSGC from gaming operations at the Company's facilities. The liability for local progressive jackpot represents the liability the Casino and the Monticello Casino and Raceway has incurred for all progressive jackpot games at each period ending date. Accrued premium game leases represent accruals for short-term slot machine leases for certain popular games. |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term debt consisted of the following at June 30, 2018 and December 31, 2017: 6/30/2018 12/31/2017 (in thousands) Term B Loan (stated amount less unamortized discount) $ 442,474 $ 443,161 Term A Loan 7,250 — Bangkok Bank Loan 16,000 16,000 Revolving Credit Facility 15,000 — Equipment Loans 27,682 31,095 Total long-term debt 508,406 490,256 Debt issuance costs (19,519 ) (20,520 ) Total long-term debt, net 488,887 469,736 Less: Current portion of long-term debt (26,143 ) (14,588 ) Long term-debt, net of current portion $ 462,744 $ 455,148 Term Loan Facility At June 30, 2018, Montreign Operating's senior secured term loan facility (the "Term Loan Facility") consisted of $7.3 million outstanding under the Term A loan (the "Term A Loan") and $442.5 million outstanding (net of original issue discount) under the Term B loan (the "Term B Loan"). Pursuant to the Building Term Loan Agreement (as amended, the "Term Loan Agreement"), among Montreign Operating, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as administrative agent, Montreign Operating drew down the Term A Loan in the amount of $9 million on May 31, 2018. Montreign Operating subsequently drew down the Term A Loan in the amounts of $8 million and $53 million on July 9, 2018 and July 23, 2018, respectively. The Term A Loan is fully drawn in accordance with the Term Loan Agreement, which required the Company to complete the draw down of the Term A Loan by July 24, 2018. The Term A Loan will mature on January 24, 2022 and the Term B Loan will mature on January 24, 2023. Interest accrues on outstanding borrowings under the Term A Loan at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. At June 30, 2018, the interest rate on the Term A Loan was 6.98% . Interest accrues on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a floor of 1% ) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. At June 30, 2018, the interest rate on the Term B Loan was 10.34% . In addition, Montreign Operating paid a commitment fee to each Term A Loan lender equal to the undrawn amount of such lender’s commitment multiplied by a rate equal to 5.0% per annum through July 24, 2018. We are required to make principal payments under the Term B Loan and the Term A Loan at the end of each calendar quarter beginning with the period ended June 30, 2018. The Company will repay one percent of the original principal balance of the Term B Loan each year, in quarterly payments of approximately $1.1 million . The Company will repay 2.5% of the original principal amount of the Term A Loan, in quarterly payments of approximately $ 1.8 million for the first year, and quarterly installments of approximately $2.6 million thereafter. The Company repaid approximately $1.8 million and $1.1 million on the Term A Loan and Term B Loan, respectively, in the three-month period ended June 30, 2018. As a condition to the Term Loan Agreement, the net proceeds from the Term A Loan, Term B Loan and the then-outstanding Kien Huat Montreign Loan, which are discussed below, were deposited into an account controlled by the lenders under the Term Loan Facility. The Term Loan Facility is guaranteed by the Project Parties and is secured by security interests in substantially all the real and personal property of the Project Parties and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding. The Term Loan Facility contains representations and warranties, customary events of default, and affirmative, negative and financial covenants. For example, the Project Parties are restricted from entering into advisory, management or consulting agreements with an affiliate of any of the Project Parties, including Empire, except for payments pursuant to tax sharing agreements, distributions in an amount not exceeding 1% of the net revenues of the Project Parties in any fiscal year, repurchase of capital stock of the Company in an amount not exceeding $1 million and required by the NYSGC, and certain available amounts of cash based on the application of financial covenants. The Term Loan Facility also includes target dates by which the Casino is required to be opened to the public and by which its development must be fully complete (as such concepts are defined in the Term Loan Agreement). In addition, the Term Loan Agreement requires us to satisfy certain financial covenants, including a maximum first lien leverage ratio, a minimum interest coverage ratio and a limitation on the maximum permissible capital expenditures by the Project Parties. The financial covenants relating to the maximum first lien leverage ratio and the minimum interest coverage ratio will be measured beginning in the first full fiscal quarter following the "Full Opening Date" of the Casino, which is the date on which at least 95% of all rooms in the hotel are open to the public. The Company anticipates that at least 95% of the hotel rooms will be ready to be occupied during the fourth quarter of 2018. As of June 30, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility. Mandatory prepayments of the Term Loan Facility will be required upon the occurrence of certain events, including sales of certain assets, casualty events and the incurrence of certain additional indebtedness, subject to certain exceptions and reinvestment rights. Revolving Credit Facility At June 30, 2018, Montreign Operating's revolving credit facility (the "Revolving Credit Facility") consisted of $15 million of outstanding borrowings. The Company borrowed $2 million under the Revolving Credit Facility on June 29, 2018. The Revolving Credit Facility provides for loans or other extensions of credit to be made to Montreign Operating in an aggregate principal amount of up to $15 million (including a letter of credit sub-facility of $10 million ) pursuant to the terms of the Revolving Credit Agreement, among Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent (as amended, the "Revolving Credit Agreement"). The proceeds of the Revolving Credit Facility may be used for working capital needs, capital expenditures and other general corporate purposes. The Revolving Credit Facility will mature on January 24, 2022. Interest accrues on outstanding borrowings at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. At June 30, 2018, the interest rate on borrowings under the Revolving Credit Facility was 7.09% . The Revolving Credit Facility is guaranteed by the Project Parties and is secured by security interests in substantially all the real and personal property of the Project Parties and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding. The Revolving Credit Facility contains representations and warranties, customary events of default, and affirmative, negative and financial covenants substantially similar to the terms of the Term Loan Agreement. Mandatory prepayments of the Revolving Credit Facility will be required upon the occurrence of certain events, including sales of certain assets, casualty events and the incurrence of certain additional indebtedness, subject to certain exceptions and reinvestment rights. As of June 30, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility. Bangkok Bank Loan At June 30, 2018, the Delayed Draw Term Loan, as amended (the "Bangkok Bank Loan") consisted of $16 million of outstanding borrowings and availability of $4 million pursuant to the Delayed Draw Term Loan Credit Agreement (the “Bangkok Bank Loan Agreement”), among Empire, Bangkok Bank PCL, New York Branch (“Bangkok Bank”), as lender, and MRMI, as guarantor. The Bangkok Bank Loan will mature on December 28, 2019. Interest accrues on outstanding borrowings under the Bangkok Bank Loan at a rate equal to LIBOR plus 6.25% , or an alternate base rate plus 5.25% per annum. At June 30, 2018, the interest rate on the Bangkok Bank Loan was 8.34% . In addition, the Company pays a commitment fee to Bangkok Bank equal to the undrawn amount of the Bangkok Bank Loan commitment multiplied by a rate equal to 1.50% per annum. Such commitment fee is paid on the last business day of each quarter and commenced on March 31, 2018. The Bangkok Bank Loan was amended (the "Bangkok Bank Loan Amendment") on June 25, 2018 concurrently with the execution of the Kien Huat Subordinate Loan Agreement, which is defined and discussed in Note H below. The Bangkok Bank Loan Amendment permitted the Company to incur the Kien Huat Subordinate Loan. The Bangkok Bank Loan is guaranteed by MRMI and is secured by a security interest in Monticello Casino and Raceway. The Bangkok Bank Loan Agreement contains customary representations and warranties and affirmative, negative and financial covenants, including representations, warranties and covenants that, among other things, restrict the ability of the Company and MRMI to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in certain transactions with affiliates, or make dividends or other distributions. Obligations under the Bangkok Bank Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as applicable), including among others, nonpayment of principal, interest or fees, breach of the affirmative or negative covenants, revocation of a gaming license after the expiration of certain cure periods, and a change of control of the Company. The Company is in compliance with the covenant requirements as of June 30, 2018. In addition, the Bangkok Bank Loan Agreement contains a financial covenant that restricts the maximum total leverage ratio of the Company, which financial covenant is applicable beginning with the fiscal quarter ended December 31, 2018. The Bangkok Bank Loan Amendment excludes the Kien Huat Subordinate Loan from calculations of the Company's maximum total leverage so long as the Kien Huat Subordinate Loan remains subordinate to the Bangkok Bank Loan. Equipment Loans The Company has entered into several financing agreements related to the purchase of its slot machines, equipment and software for its telephone, hotel and Casino operations. The original amount financed was $31.1 million and the terms of these agreements run between six and 36 months. The balances outstanding at June 30, 2018 totaled approximately $27.7 million . The stated interest rates for these loans are between zero and eight percent per annum. The Company has imputed interest on several equipment loans with stated interest rates of 0% , using the Company's cost of funds rate of approximately 10% . The weighted average of the monthly principal repayments is approximately $1.0 million . The following table lists the annual principal repayments due for the Company's long term debt as of June 30, 2018: Year ending December 31, Totals (in thousands) 2018 $13,021 2019 36,966 2020 10,190 2021 6,505 2022 19,500 2023 428,625 Totals $514,807 |
Long-Term Loans, Related Party
Long-Term Loans, Related Party | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Loans, Related Party | Long-Term Loans, Related Party Kien Huat Subordinate Loan Agreement On June 25, 2018, Kien Huat and the Company entered into a loan agreement (the “Kien Huat Subordinate Loan Agreement”), providing for loans of up to $30 million (the “Kien Huat Subordinate Loan”). The Kien Huat Subordinate Loan is subordinate to the Bangkok Bank Loan. The proceeds of the Kien Huat Subordinate Loan may be used exclusively to make capital contributions to Montreign Operating. Montreign may use such funds for marketing and general corporate purposes (including the payment of debt service). All amounts due under the Kien Huat Subordinate Loan will mature on December 28, 2020, which date may be extended for additional one -year periods if the Bangkok Bank Loan is similarly extended or accelerated in the event the Bangkok Bank Loan is accelerated. The maturity of the Kien Huat Subordinate Loan may also be extended for up to one year at the sole discretion of Kien Huat. Advances under the Kien Huat Subordinate Loan will be made in four installments as follows: (i) $5 million will be advanced no earlier than July 2, 2018; (ii) $5 million will be advanced no earlier than July 20, 2018; (iii) $10 million will be advanced no earlier than September 4, 2018; and (iv) $10 million will be advanced no earlier than September 17, 2018. The only condition to an advance will be the delivery of a request for an advance not less than five business days prior to the date of an advance and that the representations contained in the Kien Huat Subordinate Loan Agreement will be true and correct. On July 5, 2018, the Company borrowed $5 million and, on July 31, 2018, the Company borrowed an additional $5 million . The Company expects to borrow the two remaining installments of $10 million each on or about the scheduled installment dates of September September 4, 2018 and September 17, 2018, respectively. The Company paid Kien Huat a commitment fee of $0.3 million (or 1% of the principal amount) out of the proceeds of the first advance. The Kien Huat Subordinate Loan bears interest at a rate of 12% per annum, compounded monthly, and will be payable monthly in arrears. Prior to the maturity of the Kien Huat Subordinate Loan, interest will not be required to be paid in cash and will be added to the outstanding principal of the Kien Huat Subordinate Loan and will thereafter be deemed to be part of the principal indebtedness due thereunder upon maturity. The Kien Huat Subordinate Loan may be repaid in full or in part at any time without premium or penalty. The Kien Huat Subordinate Loan Agreement contains customary representations and warranties and affirmative covenants, including a restriction on the use of the proceeds of the Kien Huat Subordinate Loan as described above. Obligations under the Kien Huat Subordinate Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as applicable), including among others: nonpayment of principal, interest or fees; breach of the affirmative covenants; and a default in payment of or acceleration of the Bangkok Bank Loan. Additionally, any future amendments to the Bangkok Bank Loan Agreement relating to default provisions thereunder, prepayment provisions or an increase of the maximum principal amount thereunder will be subject to Kien Huat’s prior written consent. The Company agreed to indemnify and defend Kien Huat and its affiliates from negligent acts or omissions of the Company and its affiliates, any failure of the Company to comply with the terms of the Kien Huat Subordinate Loan Agreement and any failure of the Company to comply with any laws, except to the extent resulting from the gross negligence or willful misconduct of Kien Huat or its affiliates. Kien Huat Backstop Loan Agreement On December 28, 2017, Empire and Kien Huat entered into a loan agreement (the "Kien Huat Backstop Loan Agreement"), providing for loans to Empire in an aggregate principal amount of up to $20 million . Any amounts borrowed pursuant to the Kien Huat Backstop Loan Agreement will be used exclusively to make payments required under the Bangkok Bank Loan Agreement and will mature on the one-year anniversary of the maturity date of the Bangkok Bank Loan, or such earlier date that the Bangkok Bank Loan is terminated. At June 30, 2018, there were no outstanding borrowings pursuant to the Kien Huat Backstop Loan Agreement. The Kien Huat Backstop Loan Agreement contains representations and warranties and affirmative covenants that are usual and customary, including representations, warranties and covenants that restrict the Company’s use of the proceeds of any loans made pursuant to the Kien Huat Backstop Loan Agreement to pay amounts due and payable under the Bangkok Bank Loan. Obligations under the Kien Huat Backstop Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including among others, nonpayment of principal, interest or fees, and breach of the affirmative covenants. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock Restriction on Ownership Our common stock is transferable only subject to the provisions of Section 303 of the Racing, Pari-Mutuel Wagering and Breeding Law, so long as we hold, directly or indirectly, a license issued by the NYSGC, and may be subject to compliance with the requirements of other laws pertaining to licenses held directly or indirectly by us. The owners of common stock issued by us may be required by regulatory authorities to possess certain qualifications and may be required to dispose of their common stock if the owner does not possess such qualifications. Restriction on Ability to Pay Dividends Pursuant to the terms of the Bangkok Bank Loan Agreement, neither Empire nor any of its subsidiaries is permitted to declare or pay any dividends or make other payments to purchase, redeem, retire or otherwise acquire any capital stock of the Company. Such restriction will lapse upon the payment in full of any amounts outstanding under the Bangkok Bank Loan Agreement. Notwithstanding the foregoing, so long as no event of default has occurred, subsidiaries of Empire are permitted to pay dividends to Empire and Empire may pay dividends on the Series B Preferred Stock and for withholding taxes payable in connection with equity compensation programs. Preferred Stock and Dividends The Company paid dividends, required by the terms of the Series B Preferred Stock, during 2017 and 2018 on the following dates: on April 2, 2018 and July 2, 2018, quarterly payments in the amount of $32,087 were made for the first two quarters of 2018. For the 2017 fiscal year, quarterly payments in the amount of $32,087 were made on April 3, 2017, July 3, 2017, October 2, 2017 and January 2, 2018. |
Concentration
Concentration | 6 Months Ended |
Jun. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration | Concentration As of June 30, 2018, the Company had one gaming patron who represented 10.8% of the total net outstanding accounts receivable. As of December 31, 2017, the Company had one debtor, Hawthorne OTB, which represented 13.0% of the total net outstanding accounts receivable. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is a party from time to time to various legal actions that arise in the normal course of business. In the opinion of management, the resolution of these other matters will not have a material and adverse effect on our consolidated financial position, results of operations or cash flows. Operating Leases The following table represents the minimum lease payments under the Company's operating leases at June 30, 2018: Year ending December 31, Total Payments (in thousands) 2018 $ 5,930 2019 9,353 2020 8,948 2021 8,489 2022 8,400 2023 to 2056 361,886 Total $ 403,006 The details of operating lease commitments are described below. Casino Lease On December 28, 2015, Montreign Operating entered into a lease (the "Casino Lease") with EPT Concord II, LLC ("EPT") for the lease of the parcel on which the Casino was built (the "Casino Parcel"). The Casino Lease has a term that expires on the earlier of (i) March 31, 2086, and (ii) Montreign Operating giving EPT written notice of its election to terminate the Casino Lease (the “Termination Option”) at least 12 months prior to any one of five Option Dates (as defined below). The option dates (each an "Option Date") under the Casino Lease mean each of the 20th, 30th, 40th, 50th and 60th anniversaries of the commencement of the Casino Lease. Upon Montreign Operating's timely notice of exercise of its Termination Option, the Casino Lease will be automatically terminated effective as of the applicable Option Date. T he following table represents the fixed rent payments under the Casino Lease at June 30, 2018: Year ending December 31, Fixed Rent Payments due by Period (in thousands) 2018 (1) (2) $4,500 2019 (2) 7,500 2020 (2) 7,500 2021 (2) 8,000 2022 (2) 8,100 2023 to 2056 (2) 346,524 (1) From March 1, 2017 through August 31, 2018, fixed rent is $1 million per month. (2) From September 1, 2018 through the remainder of the term of the Casino Lease, fixed rent will equal $7.5 million per year, subject to an eight percent escalation every five years ("Base Amount"). In addition to the annual fixed rent, beginning September 2018 and through the remainder of the term of the Casino Lease (the “Percentage Rent Period”), Montreign Operating is obligated to pay an annual percentage rent equal to five percent of the Eligible Gaming Revenue (as such term is defined in the Casino Lease) in excess of the Base Amount for the Percentage Rent Period. Additionally, the lease is a net lease, and Montreign Operating has an obligation to pay the rent payable under the Casino Lease and other costs related to Montreign Operating's use and operation of the Casino Parcel, including the special district tax assessments allocated to the Casino Parcel, not to exceed the capped dollar amount applicable to the Casino Parcel. Golf Course Lease On December 28, 2015, ERREI entered into a sublease (the “Golf Course Lease”) with Adelaar Developer, LLC (the "Destination Resort Developer") for the lease of the Golf Course Parcel. The terms of the Golf Course Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Golf Course Lease, there is no percentage rent due. The following table represents the future fixed rent payments under the Golf Course Lease at June 30, 2018: Year ending December 31, Fixed Rent Payments due by Period (in thousands) 2018 (1) $0 2019 (1) (2) 125 2020 (2) 150 2021 (2) 150 2022 (2) 150 2023 to 2056 (2) (3) 7,675 (1) From the date the Golf Course Lease commenced (the “Golf Course Lease Commencement Date”) and until the date on which the Golf Course opens for business, which is expected to be in Summer of 2019 (the “Golf Course Opening Date”), fixed rent payments will equal $0 . (2) From the Golf Course Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per year. (3) From March 2029 through the remainder of the term of the Golf Course Lease, fixed rent will equal $250,000 per year. The Golf Course Lease is a net lease and ERREI is obligated to pay the rent payable under the Golf Course Lease and other costs related to ERREI's use and operation of the Golf Course Parcel, including the special district tax assessments allocated to the Golf Course Parcel, not to exceed the capped dollar amount applicable to the Golf Course Parcel. This obligation will not be assessed against ERREI prior to 60 months following the Golf Course Lease Commencement Date. Entertainment Project Lease On December 28, 2015, ERREII entered into a sublease (the “Entertainment Project Lease”) with the Destination Resort Developer, for the lease of the Entertainment Project Parcel. The terms of the Entertainment Project Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Entertainment Project Lease, there is no percentage rent due. The following table represents the future fixed rent payments under the Entertainment Project Lease at June 30, 2018: Year ending December 31, Fixed Rent Payments due by Period (in thousands) 2018 (1) (2) $12 2019(2) 150 2020 (2) 150 2021 (2) 150 2022 (2) 150 2023 to 2056 (2) (3) 7,713 (1) From the date the Entertainment Project Lease commenced (the “Entertainment Project Lease Commencement Date”) and until the date on which the Entertainment Project opens for business, which is expected to be December 2018 (the “Entertainment Project Opening Date”), fixed rent payments will equal $0 . (2) From the Entertainment Project Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per year. (3) From September 2028 through the remainder of the term of the Entertainment Project Lease, fixed rent will equal $250,000 per year. The Entertainment Project Lease is a net lease and ERREII is obligated to pay the rent payable under the Entertainment Project Lease and other costs related to ERREII's use and operation of the Entertainment Project Parcel, including the special district tax assessments allocated to the Entertainment Project Parcel, not to exceed the capped dollar amount applicable to the Entertainment Project Parcel. This obligation will not be assessed against ERREII prior to 60 months following the Entertainment Project Lease Commencement Date. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions RWS License Agreement On March 31, 2017, Montreign Operating entered into a license agreement (the “RWS License Agreement”) with RW Services Pte Ltd (“RWS”). RWS is an affiliate of Tan Sri Lim Kok Thay, who is a beneficiary of, and controls, Kien Huat. Pursuant to the RWS License Agreement, RWS granted Montreign Operating the non-exclusive, non-transferable, revocable and limited right to use certain “Genting” and “Resorts World” trademarks (the “RWS Licensed Marks”) in connection with the development, marketing, sales, management and operation (the “Permitted Uses”) of the Development Projects. The name of the Casino is “Resorts World Catskills,” and, notwithstanding the foregoing, the use of such name is exclusive to Montreign Operating and may be used in connection with online gaming in addition to the Permitted Uses The initial term of the RWS License Agreement will expire on December 31, 2027 and will be extended automatically for additional terms of 12 months each, up to a maximum of 39 additional terms, unless either of the parties provides notice to terminate the RWS License Agreement or upon the mutual written consent of both parties. Beginning on the date on which the Casino opened to the public, Montreign Operating pays to RWS a fee equivalent to a percentage of Net Revenue (as such term is defined in the RWS License Agreement) generated in each calendar year from (i) all activity at the Casino, (ii) each specific use of the RWS Licensed Marks in the Entertainment Project or Golf Course and (iii) each specific use of the name Resorts World Catskills in connection with online gaming. The percentage of Net Revenue payable as the fee is a low single digit percentage that will increase incrementally between the third year and sixth year of the term of the RWS License Agreement and will remain a low single digit percentage during the entire term of the RWS License Agreement. The Company recorded an expense of approximately $400,000 and $627,000 for the three-month and six-month periods ended June 30, 2018, respectively, reflecting the fee payable pursuant to the RWS License Agreement. Moelis Agreement On August 7, 2018, the Company entered into an engagement agreement (the "Moelis Engagement Agreement") pursuant to which it engaged Moelis & Company LLC ("Moelis") to act as the Company’s exclusive financial advisor in its review of opportunities in online gaming, sports betting and interactive gaming. Pursuant to the Moelis Engagement Agreement, Moelis has also been engaged as exclusive financial advisor with respect to a strategic financing transaction for the Company, if any. Pursuant to the Moelis Engagement Agreement, we will pay Moelis a retainer fee of $100,000 upon execution. In the event a transaction is consummated, the Moelis Engagement Agreement contemplates additional transaction-based fees would be earned by Moelis. Gregg Polle, one of the directors of the Company, is a Managing Director of Moelis. Mr. Polle refrained from participating in the discussion of the Moelis Engagement Agreement and abstained from voting on whether to enter into such agreement. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 5, 2018, the Company borrowed $5 million , less a $0.3 million commitment fee, under the Kien Huat Subordinate Loan Agreement. On July 31, 2018, the Company borrowed an additional $5 million . See Note H for a discussion of the terms of the Kien Huat Subordinate Loan Agreement. On July 9, 2018 and July 23, 2018, Montreign Operating drew down $8 million and $53 million , respectively, under the Term A Loan. The July 23, 2018 drawdown was the last in a series of drawdowns on the Term A Loan. The Term A Loans were borrowed at LIBOR plus 5.0% interest rates under the Term Loan Facility. The total amount drawn down under the Term A Loan prior to the expiration of the borrowing period on July 24, 2018 was $70 million . See Note G for a discussion of the terms of the Term Loan Facility. On August 7, 2018, the Company entered into an engagement agreement (the "Moelis Engagement Agreement") pursuant to which it engaged Moelis & Company LLC ("Moelis") to act as the Company’s exclusive financial advisor in its review of opportunities in online gaming, sports betting and interactive gaming. Pursuant to the Moelis Engagement Agreement, Moelis has also been engaged as exclusive financial advisor with respect to a strategic financing transaction for the Company, if any. Pursuant to the Moelis Engagement Agreement, we will pay Moelis a retainer fee of $100,000 upon execution. In the event a transaction is consummated, the Moelis Engagement Agreement contemplates additional transaction-based fees would be earned by Moelis. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Reclassifications | Reclassifications Certain amounts in the accompanying consolidated financial statements for the 2017 period have been reclassified to conform to presentation in the 2018 period, most notably amortization of debt issuance costs has been included within interest expense on the Condensed Consolidated Statement of Operations. |
Cash and cash equivalents | Cash, cash equivalents and restricted cash Cash and cash equivalents include cash on hand, demand deposits and certificates of deposit with original maturities of three months or less at acquisition. The Company maintains significant cash balances with financial institutions, which are not covered by the Federal Deposit Insurance Corporation. The Company has not incurred any losses in such accounts and believes it is not exposed to any significant credit risk on cash. |
Capitalized Interest | Capitalized Interest Interest costs incurred in connection with the construction of the Casino and the Development Projects have been capitalized in the cost of the projects. Capitalization will cease when the Casino or the other Development projects are substantially complete or if development activity is suspended for an extended period of time. |
Revenue recognition and Promotional allowances | Revenue recognition As described below, the Company adopted the provisions of new accounting standards and updates as codified in the Accounting Standards Codification (ASC) Topic 606 regarding revenue recognition. The Company adopted this guidance as of January 1, 2018 using the modified retrospective approach. Under the modified retrospective approach, amounts presented as of December 31, 2017 and for the three-month and six-month periods ended June 30, 2017 have not been adjusted to reflect the impact of the ASC Topic 606. This approach does not significantly impact the comparability of the 2018 and 2017 amounts. The promotional allowances recorded in 2017 are no longer presented in 2018 under ASC Topic 606. The adoption of the provisions of ASC 606 resulted in an increase to “Other accrued liabilities” of $54,000 and “Accumulated deficit” of $54,000 at January 1, 2018. These increases were exclusively the result of remeasuring the loyalty program liability from a deferred cost model to a deferred revenue model. This change only impacts MRMI, since the Casino did not commence operations until February 8, 2018. The Company’s patron transactions primarily consist of gaming wagers, hotel room and food and beverage purchases. The transaction price for gaming wagers is the difference between gaming wins and losses, not the total amount wagered. The transaction price for hotel room and food and beverage purchases is the net amount collected from the patron for such goods and services. Hotel room and food and beverage goods and services have been determined to be separate, stand-alone transactions and the transaction price for such goods or services is recorded as revenue as they are transferred to the patron over the duration of the patron’s stay at the hotel or when the Company provides the food and beverage services. In the case of a hotel stay involving multiple days, the total transaction price of the stay is recognized on a straight-line basis as the reservation for total days of stay is non-cancelable by the patron. The Company collects advanced deposits from hotel patrons for future reservations representing obligations of the Company until the room stay is provided to the patron. Gaming wagers by patrons who are members of our loyalty programs represent two performance obligations of the Company. Patrons who are members of our loyalty programs earn loyalty points for gaming wagers. Points awarded under our loyalty programs are given to members based on their gaming play and the promise to provide points to members is required to be accounted for as a separate performance obligation. The Company applies a practical expedient by accounting for gaming wagers on a portfolio basis, as such wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to each individual patron. For purposes of allocating the transaction price when loyalty points are earned, the Company allocates an amount to the loyalty point liability based on the stand-alone selling price ("SSP") of the points earned, which is determined by the value of a point that can be redeemed for a hotel room or food and beverage services. An amount is allocated to the gaming wager performance obligation using the residual approach as the stand-alone price for wagers is highly variable and no set established price exists for such wagers. The allocated revenue for gaming wagers is recognized when the wagers occur because all such wagers settle immediately. The loyalty point liability amount is deferred and recognized as revenue when the patron redeems the points for a hotel room stay or for food and beverage services and such goods or services are provided to the patron. Prior to the adoption of ASC 606, we determined our liability for unredeemed points based on the estimated costs of services or merchandise to be provided and estimated redemption rates. Additionally, outside of our loyalty programs and at our discretion, we offer our patrons complimentary goods and services, primarily food and beverage and hotel room stays. Such complimentaries are provided in conjunction with revenue-generating gaming activity and are largely provided to entice contemporaneous and future revenue-generating gaming activities. We allocate a portion of the transaction price for gaming wagers we receive from such patrons to the complimentary goods and services provided to such patrons using the residual approach. This allocation is based on the estimated SSP of the underlying goods and services provided, which are determined based on observed SSP we receive for selling such goods and services. Hospitality Revenues: Food and beverage revenues, and room revenues include (i) revenues generated from transactions with patrons for such goods and/or services, (ii) revenues recognized through the redemption of points from our loyalty programs for such goods and/or services, and (iii) revenues generated as a result of providing such goods and/or services on a complimentary basis in conjunction with gaming activities. Food and beverage revenues and room revenues are recognized when goods are delivered and services are performed. In general, performance obligations associated with these transactions are satisfied at a point-in-time, but may also be satisfied over a period of time, which is typically over the course of a patron’s stay. Advance deposits on rooms are reflected as a performance obligation liability until the goods and/or services are provided to the patron. The Company's performance obligation liabilities are included in “Accrued expenses and other accrued liabilities” in our unaudited condensed consolidated balance sheets. Racing Revenues: Racing revenues include revenue earned from pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks. Some elements of racing revenue from Off-Track Betting Corporations (“OTBs”) are recognized as collected, due to uncertainty of receipt and timing of payments. Other Revenues: Other revenues primarily include commissions received on ATM transactions and cash advances, as well as lottery tickets, which are recorded on a net basis as the Company represents the agent in its relationship with the third-party service providers. Other revenues also include the sale of retail goods, which are recognized at the time the goods are delivered to the customer. Subsequent to the adoption of ASC 606, complimentary food and beverage revenues and room revenues are included in food and beverage revenues, room revenues, and other revenues, with a corresponding decrease to gaming revenues, in the unaudited condensed consolidated statements of operations. See “Recent Accounting Pronouncements” for further information regarding the adoption of ASC 606. |
Accounts receivable | Accounts receivable Accounts receivable, net of allowances, are stated at the amount the Company expects to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectibility of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and the Company’s judgment of collectibility. In the normal course of business, the Company settles wagers for other racetracks and is exposed to credit risk. These wagers are included in accounts receivable. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Earnings (loss) per common share | Common stock - loss per share The Company computes basic loss per share by dividing net loss applicable to common shares by the weighted-average common shares outstanding for the period. Diluted loss per share reflects the potential dilution of earnings that could occur if securities or contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three-month and six-month periods ended June 30, 2018 and and 2017 were the same. |
Fair value | Fair value The Company follows the provisions of ASC 820, “Fair Value Measurement,” issued by the FASB for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The Company chose not to elect the fair value option as prescribed by the FASB for its financial assets and liabilities that had not been previously carried at fair value. The Company’s financial instruments are primarily comprised of current assets, restricted cash and investments, Interest Rate Cap, current liabilities and long-term debt. Current assets, investments and current liabilities approximate fair value due to their short-term nature. In determining fair value, the Company uses quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. The fair value hierarchy of observable inputs used by the Company is broken down into three levels based on the source of inputs as follows: - Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. - Level 2 - Valuations based on inputs that are observable inputs and quoted prices in active markets for similar assets and liabilities. - Level 3 - Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. |
Stock-based compensation | Stock-based compensation The cost of all share-based awards to employees, including grants of employee stock options and restricted stock, is recognized in the financial statements based on the fair value of the awards at grant date. The fair value of stock option awards is determined using the Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the market price of Empire’s common stock on the date of grant. The fair value of share-based awards is recognized as stock-based compensation expense on a straight-line basis over the requisite service period from the date of grant. |
Income taxes | Income taxes The Company applies the asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates for the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. |
Intangible Assets | Intangible Assets In accordance with ASC 350, Intangibles - Goodwill and Other, the Company amortizes intangible assets over their estimated useful lives unless the Company determines their lives to be indefinite. |
Recent accounting pronouncements | Recent accounting pronouncements In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which provides guidance for accounting for leases. Under ASU 2016-02, the Company will be required to recognize the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard must be adopted using a modified retrospective approach and provides for certain practical expedients. Early adoption is permitted. The Company intends to adopt the standard on January 1, 2019 and apply the package of practical expedients available to it upon adoption. The Company continues to evaluate the effect that ASU 2016-02 will have on consolidated financial statements, but we expect that ASU 2016-02 will have a material effect on the condensed consolidated balance sheets as a result of the recognition of certain leases as right-of-use assets and lease liabilities. In November 2016, FASB issued ASU 2016-18, "Restricted Cash" Topic 230, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The Company adopted this standard on January 1, 2018 using the retrospective transition method. The impact of the new standard is that the Company's condensed consolidated statements of cash flows now present the change in a combined amount for both restricted and unrestricted cash and cash equivalents for all periods presented. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | Complimentary food and beverage revenues, and complimentary room revenues for the three-month and six-month periods ended June 30, 2018 and 2017, respectively, were as follows: Three Months Ended Six Months Ended 06/30/2018 06/30/2017 06/30/2018 06/30/2017 (in thousands) (in thousands) Complimentary food and beverage revenues $2,218 $127 $3,234 $293 Complimentary room revenues 786 — 950 — |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows: June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 (in thousands) Cash and cash equivalents $16,743 $10,380 $6,449 $11,012 Restricted cash 984 693 924 1,078 Restricted cash for Development Projects 22,414 41,982 51,721 26,384 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $40,141 $53,055 $59,094 $38,474 |
Summary of the approximate number of common stock equivalents outstanding | The following table shows the approximate number of common stock equivalents outstanding at June 30, 2018 and 2017 that could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share for the three-month and six-month periods ended June 30, 2018 and 2017, because their inclusion would have been anti-dilutive to the loss per common share: Outstanding at June 30, June 30, Unvested Restricted stock 73,000 148,000 Warrants 193,000 133,000 Restricted stock units ("RSUs") 158,000 55,000 Option Matching Rights 1,000 6,000 Options 12,000 19,000 Total 437,000 361,000 |
Fair Value, Assets Measured on Recurring Basis | The following table presents the carrying amount, fair values and classification level within the fair value hierarchy of financial instruments measured or disclosed at fair value on a recurring basis: June 30, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Level of Fair Value Hierarchy Assets: (in thousands) Cash and cash equivalents $16,743 $16,743 $10,380 $10,380 Level 1 Restricted cash 984 984 693 693 Level 1 Interest Rate Cap 282 282 251 251 Level 2 Restricted cash and investments for Development Projects: Cash and cash equivalents 22,414 22,414 41,982 41,982 Level 1 Short-term investments 7,044 7,026 94,449 94,209 Level 2 Liabilities: Term B Loan, net of discount 442,474 448,589 443,161 449,749 Level 2 Term A Loan 7,250 7,250 — — Level 2 Bangkok Bank Loan 16,000 16,000 16,000 16,000 Level 3 Revolving Credit Facility 15,000 15,000 — — Level 2 Equipment loans 27,682 27,682 31,095 31,095 Level 3 |
Fair Value, Liabilities Measured on Recurring Basis | he following table presents the carrying amount, fair values and classification level within the fair value hierarchy of financial instruments measured or disclosed at fair value on a recurring basis: June 30, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Level of Fair Value Hierarchy Assets: (in thousands) Cash and cash equivalents $16,743 $16,743 $10,380 $10,380 Level 1 Restricted cash 984 984 693 693 Level 1 Interest Rate Cap 282 282 251 251 Level 2 Restricted cash and investments for Development Projects: Cash and cash equivalents 22,414 22,414 41,982 41,982 Level 1 Short-term investments 7,044 7,026 94,449 94,209 Level 2 Liabilities: Term B Loan, net of discount 442,474 448,589 443,161 449,749 Level 2 Term A Loan 7,250 7,250 — — Level 2 Bangkok Bank Loan 16,000 16,000 16,000 16,000 Level 3 Revolving Credit Facility 15,000 15,000 — — Level 2 Equipment loans 27,682 27,682 31,095 31,095 Level 3 |
Prepaid Expenses and Other As21
Prepaid Expenses and Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets, as presented on the balance sheet, are comprised of the following at June 30, 2018 and December 31, 2017: 6/30/2018 12/31/2017 (in thousands) Empire Zones real estate tax credit $ 270 $ 814 Prepaid real estate taxes 540 443 Prepaid insurance 203 327 Prepaid advertising 92 — Prepaid gaming expenses 1,568 74 Development escrow and refundable security deposit 1,292 780 Prepaid other 1,653 938 Total prepaid expenses and other current assets $ 5,618 $ 3,376 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment at June 30, 2018 and December 31, 2017 consists of the following: 6/30/2018 12/31/2017 (in thousands) Land $ 770 $ 770 Land improvements 1,759 1,759 Buildings 576,938 4,727 Building improvements 76,293 29,874 Furniture, fixtures and equipment 33,379 5,551 Construction in Progress 436 77 689,575 42,758 Less: Accumulated depreciation (28,356 ) (15,895 ) $ 661,219 $ 26,863 |
Accrued Expenses and Other Cu23
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities, as presented on the condensed consolidated balance sheet, are comprised of the following at June 30, 2018 and December 31, 2017: 6/30/2018 12/31/2017 (in thousands) Liability for horseracing purses $ 1,449 $ 886 Accrued payroll 4,962 1,715 Deferred revenue - loyalty points 1,577 271 Liability to the NYSGC 1,662 1,507 Liability for local progressive jackpot 2,431 1,110 Accrued premium game leases 617 — Accrued professional fees 1,823 744 Accrued interest expense 378 14 Accrued utilities 656 81 Accrued other 5,393 992 Total accrued expenses and other current liabilities $ 20,948 $ 7,320 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | Long-term debt consisted of the following at June 30, 2018 and December 31, 2017: 6/30/2018 12/31/2017 (in thousands) Term B Loan (stated amount less unamortized discount) $ 442,474 $ 443,161 Term A Loan 7,250 — Bangkok Bank Loan 16,000 16,000 Revolving Credit Facility 15,000 — Equipment Loans 27,682 31,095 Total long-term debt 508,406 490,256 Debt issuance costs (19,519 ) (20,520 ) Total long-term debt, net 488,887 469,736 Less: Current portion of long-term debt (26,143 ) (14,588 ) Long term-debt, net of current portion $ 462,744 $ 455,148 |
Contractual Obligation, Fiscal Year Maturity Schedule | The following table lists the annual principal repayments due for the Company's long term debt as of June 30, 2018: Year ending December 31, Totals (in thousands) 2018 $13,021 2019 36,966 2020 10,190 2021 6,505 2022 19,500 2023 428,625 Totals $514,807 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table represents the future fixed rent payments under the Entertainment Project Lease at June 30, 2018: Year ending December 31, Fixed Rent Payments due by Period (in thousands) 2018 (1) (2) $12 2019(2) 150 2020 (2) 150 2021 (2) 150 2022 (2) 150 2023 to 2056 (2) (3) 7,713 (1) From the date the Entertainment Project Lease commenced (the “Entertainment Project Lease Commencement Date”) and until the date on which the Entertainment Project opens for business, which is expected to be December 2018 (the “Entertainment Project Opening Date”), fixed rent payments will equal $0 . (2) From the Entertainment Project Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per year. (3) From September 2028 through the remainder of the term of the Entertainment Project Lease, fixed rent will equal $250,000 per year. The following table represents the minimum lease payments under the Company's operating leases at June 30, 2018: Year ending December 31, Total Payments (in thousands) 2018 $ 5,930 2019 9,353 2020 8,948 2021 8,489 2022 8,400 2023 to 2056 361,886 Total $ 403,006 T he following table represents the fixed rent payments under the Casino Lease at June 30, 2018: Year ending December 31, Fixed Rent Payments due by Period (in thousands) 2018 (1) (2) $4,500 2019 (2) 7,500 2020 (2) 7,500 2021 (2) 8,000 2022 (2) 8,100 2023 to 2056 (2) 346,524 (1) From March 1, 2017 through August 31, 2018, fixed rent is $1 million per month. (2) From September 1, 2018 through the remainder of the term of the Casino Lease, fixed rent will equal $7.5 million per year, subject to an eight percent escalation every five years ("Base Amount"). Under the Golf Course Lease, there is no percentage rent due. The following table represents the future fixed rent payments under the Golf Course Lease at June 30, 2018: Year ending December 31, Fixed Rent Payments due by Period (in thousands) 2018 (1) $0 2019 (1) (2) 125 2020 (2) 150 2021 (2) 150 2022 (2) 150 2023 to 2056 (2) (3) 7,675 (1) From the date the Golf Course Lease commenced (the “Golf Course Lease Commencement Date”) and until the date on which the Golf Course opens for business, which is expected to be in Summer of 2019 (the “Golf Course Opening Date”), fixed rent payments will equal $0 . (2) From the Golf Course Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per year. (3) From March 2029 through the remainder of the term of the Golf Course Lease, fixed rent will equal $250,000 per year. |
Organization and Nature of Bu26
Organization and Nature of Business (Details) $ in Millions | Jun. 30, 2018USD ($)room |
Debt Instrument [Line Items] | |
Guaranteed maximum price | $ 33 |
Number of Hotel Rooms | room | 100 |
Largest stockholder | |
Debt Instrument [Line Items] | |
Current financing available | $ 333 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Feb. 25, 2016 | Feb. 28, 2017 | Jun. 30, 2018 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||||
Restricted cash for Development Projects | $ 22,414 | $ 22,414 | $ 51,721 | $ 41,982 | $ 26,384 | |||
Restricted cash and investments for Development Projects | 29,458 | 29,458 | 136,431 | |||||
Restricted Cash and Investments | 136,400 | |||||||
Customer Loyalty Program Liability, Current | 1,600 | 1,600 | 300 | |||||
Accrued rent | 7,500 | 7,500 | 8,300 | |||||
Gaming Facility License Term | 10 years | |||||||
Restricted cash and investments for Development Projects | 22,400 | 22,400 | 41,900 | |||||
Allowance for doubtful accounts | 130 | 130 | $ 171 | |||||
Interest charges capitalized | $ 300 | $ 5,900 | $ 11,300 | $ 9,400 | ||||
Common stock, shares issued (shares) | 32,735,000 | 32,735,000 | 32,560,000 | |||||
Total unrecognized compensation | $ 3,000 | $ 3,000 | ||||||
Vesting period for unrecognized compensation cost to be recognized (in years) | 3 years | |||||||
Accumulated other comprehensive loss | 128 | $ 128 | $ 315 | |||||
Short-term Investments | 7,000 | 7,000 | 94,500 | |||||
Retained Earnings (Accumulated Deficit) | 359,357 | 359,357 | 301,032 | |||||
Montreign [Member] | ||||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||||
Gaming Facility License Fee | $ 51,000 | |||||||
Term Loan Facility, Term B Loan [Member] | ||||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||||
Restricted cash for Development Projects | 29,500 | 29,500 | ||||||
Payments of Debt Restructuring Costs | $ 675 | |||||||
Other Assets, Fair Value Disclosure | 282 | 282 | 251 | |||||
Commercial Paper [Member] | ||||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||||
Short-term Investments | 3,500 | 3,500 | 59,400 | |||||
US Treasury Notes Securities [Member] | ||||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||||
Short-term Investments | 3,500 | 3,500 | $ 35,100 | |||||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||||
Other Accrued Liabilities | 54 | 54 | ||||||
Retained Earnings (Accumulated Deficit) | $ 54 | $ 54 | ||||||
Kien Huat Realty III Limited Investment Agreement [Member] | Kien Huat Realty III Limited [Member] | ||||||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||||||
Common stock, shares issued (shares) | 200,000 | 200,000 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Complimentary food and beverage revenues | $ 2,218 | $ 127 | $ 3,234 | $ 293 |
Complimentary room revenues | $ 786 | $ 0 | $ 950 | $ 0 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and Cash Equivalents, at Carrying Value | $ 16,743 | $ 10,380 | $ 6,449 | $ 11,012 |
Restricted cash | 984 | 693 | 924 | 1,078 |
Restricted cash for Development Projects | 22,414 | 41,982 | 51,721 | 26,384 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 40,141 | $ 53,055 | $ 59,094 | $ 38,474 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Stock option equivalents (Details) - shares shares in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total number of common stock equivalents outstanding (in shares) | 437 | 361 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total number of common stock equivalents outstanding (in shares) | 73 | 148 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total number of common stock equivalents outstanding (in shares) | 193 | 133 |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total number of common stock equivalents outstanding (in shares) | 158 | 55 |
Option Matching Rights [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total number of common stock equivalents outstanding (in shares) | 1 | 6 |
Restricted stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total number of common stock equivalents outstanding (in shares) | 12 | 19 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Fair Value of Financial Instruments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and Cash Equivalents, at Carrying Value | $ 16,743 | $ 10,380 | $ 6,449 | $ 11,012 |
Restricted cash for Development Projects | 22,400 | 41,900 | ||
Short-term Investments | 7,000 | 94,500 | ||
Long-term Debt | 488,887 | 469,736 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and Cash Equivalents, at Carrying Value | 16,743 | 10,380 | ||
Cash and Cash Equivalents, Fair Value Disclosure | 16,743 | 10,380 | ||
Restricted cash | 984 | 693 | ||
Restricted Cash, Current, Fair Value Disclosure | 984 | 693 | ||
Restricted cash for Development Projects | 22,414 | 41,982 | ||
Restricted Cash, Noncurrent, Fair Value Disclosure | 22,414 | 41,982 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term Investments | 7,044 | 94,449 | ||
Short-term Investments, Fair Value Disclosure | 7,026 | 94,209 | ||
Bangkok Bank Loan [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Lines of Credit, Fair Value Disclosure | 16,000 | 16,000 | ||
Long-term Line of Credit | 16,000 | 16,000 | ||
Fifth Third Revolver [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Lines of Credit, Fair Value Disclosure | 15 | 0 | ||
Long-term Line of Credit | 15,000 | 0 | ||
Equipment Loans [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt | 27,700 | |||
Equipment Loans [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt | 27,682 | 31,095 | ||
Lines of Credit, Fair Value Disclosure | 27,682 | 31,095 | ||
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Asset | 282 | 251 | ||
Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt | 442,474 | 443,161 | ||
Notes Payable, Fair Value Disclosure | 448,589 | 449,749 | ||
Commercial Paper [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term Investments | 3,500 | 59,400 | ||
US Treasury Notes Securities [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Short-term Investments | $ 3,500 | $ 35,100 |
Prepaid Expenses and Other As32
Prepaid Expenses and Other Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Number of years of participation (in years) | 10 years | |
Refund reduction percent | 20.00% | |
Refund percent | 20.00% | |
Proceeds from Income Tax Refunds | $ 270 | |
Prepaid taxes | $ 814 | $ 270 |
Prepaid Gaming Expenses, Supplies | $ 334 |
Prepaid Expenses and Other As33
Prepaid Expenses and Other Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Empire Zones real estate tax credit | $ 270 | $ 814 |
Prepaid real estate taxes | 540 | 443 |
Prepaid insurance | 203 | 327 |
Prepaid advertising | 92 | 0 |
Prepaid gaming expenses | 1,568 | 74 |
Development escrow and refundable security deposit | 1,292 | 780 |
Prepaid other | 1,653 | 938 |
Total prepaid expenses and other current assets | $ 5,618 | $ 3,376 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Feb. 08, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | $ 689,575 | $ 689,575 | $ 42,758 | |||
Less: Accumulated depreciation | (28,356) | (28,356) | (15,895) | |||
Property and equipment, net | 661,219 | 661,219 | 26,863 | |||
Project Development Costs Incurred Transferred to Property and Equipment | $ 646,800 | 630,100 | ||||
Capitalized project development costs | 9,400 | 9,400 | 566,800 | |||
Depreciation | 7,805 | $ 389 | 12,461 | $ 725 | ||
Land [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 770 | 770 | 770 | |||
Land Improvements [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 1,759 | 1,759 | 1,759 | |||
Building [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 576,938 | 576,938 | 4,727 | |||
Building Improvements [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 76,293 | 76,293 | 29,874 | |||
Furniture, fixtures and equipment [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | 33,379 | 33,379 | 5,551 | |||
Construction in Progress [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property and equipment, gross | $ 436 | $ 436 | $ 77 |
Development Projects Costs (Det
Development Projects Costs (Details) - USD ($) $ in Millions | Feb. 08, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 28, 2017 | Jun. 30, 2017 | Feb. 29, 2016 |
Development Costs [Line Items] | ||||||
Capitalized project development costs | $ 9.4 | $ 566.8 | ||||
Project Development Costs Incurred Transferred to Property and Equipment | $ 646.8 | 630.1 | ||||
Deposit assets | $ 20 | $ 15 | ||||
Deposit Asset, Percent of Minimum Capital Investment Expended for Deposit Return | 85.00% | |||||
Construction Manager Costs [Member] | ||||||
Development Costs [Line Items] | ||||||
Capitalized project development costs | 8.4 | 560.2 | ||||
Architectural, Engineering, Construction Manager, and Subcontractor [Member] | ||||||
Development Costs [Line Items] | ||||||
Capitalized project development costs | $ 1 | $ 6.6 |
Accrued Expenses and Other Cu36
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Payables and Accruals [Abstract] | ||
Project Development Costs | $ 37,427 | $ 71,712 |
Liability for horseracing purses | 1,449 | 886 |
Accrued payroll | 4,962 | 1,715 |
Deferred revenue - loyalty points | 1,577 | 271 |
Liability to the NYSGC | 1,662 | 1,507 |
Liability for local progressive jackpot | 2,431 | 1,110 |
Accrued premium game leases | 617 | 0 |
Accrued professional fees | 1,823 | 744 |
Accrued interest expense | 378 | 14 |
Accrued utilities | 656 | 81 |
Accrued other | 5,393 | 992 |
Total accrued expenses and other current liabilities | 20,948 | $ 7,320 |
Increase in deferred revenues | $ 1,300 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 508,406 | $ 490,256 |
Debt issuance costs | (19,519) | (20,520) |
Total long-term debt, net | 488,887 | 469,736 |
Less: Current portion of long-term debt | (26,143) | (14,588) |
Long-term debt, net of current portion | 462,744 | 455,148 |
Term Loan Facility, Term B Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 442,474 | 443,161 |
Term Loan Facility, Term A Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 7,250 | 0 |
Bangkok Bank Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 16,000 | 16,000 |
Montreign Operating Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 15,000 | 0 |
FF&E Financing [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 27,682 | $ 31,095 |
Long-Term Debt - Term Loan Faci
Long-Term Debt - Term Loan Facility (Details) - USD ($) | Jul. 23, 2018 | Jul. 09, 2018 | May 31, 2018 | Jan. 24, 2017 | Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jul. 24, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||||||||
Long-term Debt | $ 488,887,000 | $ 488,887,000 | $ 469,736,000 | |||||||
Debt Instrument, Covenant, Tax Sharing Agreement, Distributions Percentage of Net Revenues, Maximum | 1.00% | |||||||||
Debt Instrument, Covenant, Repurchase of Capital Stock, Maximum | $ 1,000,000 | |||||||||
Term Loan Facility, Term A Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of debt | 9,000,000 | $ 0 | ||||||||
Term Loan Facility, Term B Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of debt | 0 | $ 441,871,000 | ||||||||
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term Debt | $ 7,300,000 | $ 7,300,000 | ||||||||
Proceeds from issuance of debt | $ 9,000,000 | |||||||||
Stated percentage | 6.98% | 6.98% | ||||||||
Debt Instrument, Repayment Percent of Principal | 2.50% | 2.50% | ||||||||
Debt Instrument, Periodic Payment, Principal, First Year | $ 1,800,000 | |||||||||
Debt Instrument, Periodic Payment, Principal, Second Year and Thereafter | 2,600,000 | |||||||||
Repayments of Debt | $ 1,800,000 | |||||||||
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 5.00% | |||||||||
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member] | Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 4.00% | |||||||||
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term Debt | $ 442,500,000 | $ 442,500,000 | ||||||||
Stated percentage | 10.34% | 10.34% | ||||||||
Debt Instrument, Repayment Percent of Principal | 1.00% | 1.00% | ||||||||
Repayments of Debt | $ 1,100,000 | |||||||||
Debt Instrument, Periodic Payment, Principal | $ 1,100,000 | |||||||||
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 8.25% | |||||||||
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Stated percentage | 1.00% | |||||||||
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 7.25% | |||||||||
Subsequent Event | Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of debt | $ 53,000,000 | $ 8,000,000 | ||||||||
Commitment fee percent, after closing date | 5.00% | |||||||||
Scenario, Forecast [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Minimum Expected Occupancy Rate, Percentage | 95.00% |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facility (Details) - Montreign Operating [Member] - USD ($) | Jun. 29, 2018 | Jun. 30, 2018 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 15,000,000 | |
Amount borrowed under line of credit | $ 2,000,000 | |
Maximum borrowing capacity | $ 15,000,000 | |
Stated percentage | 7.09% | |
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 5.00% | |
Revolving Credit Facility [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.00% | |
Letter of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 10,000,000 |
Long-Term Debt - Bankok Bank Lo
Long-Term Debt - Bankok Bank Loan (Details) - Bangkok Bank Loan [Member] - USD ($) $ in Millions | Dec. 28, 2017 | Jun. 30, 2018 |
Debt Instrument [Line Items] | ||
Stated percentage | 8.34% | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 1.50% | |
London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 6.25% | |
Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 5.25% | |
Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 16 |
Long-Term Debt - Equipment Loan
Long-Term Debt - Equipment Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 488,887 | $ 469,736 |
Cost of funds rate | 10.00% | |
Equipment Loans [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 31,100 | |
Long-term Debt | $ 27,700 | |
Stated percentage | 0.00% | |
Long-term Debt, Maturities, Weighted Average of Monthly Repayments | $ 1,000 | |
Equipment Loans [Member] | Minimum | ||
Debt Instrument [Line Items] | ||
Debt instrument, term (in months) | 6 months | |
Stated percentage | 0.00% | |
Equipment Loans [Member] | Maximum | ||
Debt Instrument [Line Items] | ||
Debt instrument, term (in months) | 36 months | |
Stated percentage | 800.00% |
Long-Term Debt - Schedule of An
Long-Term Debt - Schedule of Annual Principal Repayments (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Debt Instrument [Line Items] | |
2,018 | $ 13,021 |
2,019 | 36,966 |
2,020 | 10,190 |
2,021 | 6,505 |
2,022 | 19,500 |
2,023 | 428,625 |
Totals | $ 514,807 |
Long-Term Loans, Related Party
Long-Term Loans, Related Party (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2018 | Jun. 25, 2018 | |
Kien Huat Backstop Loan [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount of promissory note | $ 20,000,000 | |
Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 30,000,000 | |
Extension period (in years) | 1 year | |
Commitment fee | $ 300,000 | |
Commitment fee (as a percentage) | 1.00% | |
Stated percentage | 12.00% | |
Advanced no earlier than July 2, 2018 | Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 5,000,000 | |
Advanced no earlier than July 20, 2018 | Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 5,000,000 | |
Advanced no earlier than September 4, 2018 | Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 10,000,000 | |
Advanced no earlier than September 17, 2018 | Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 10,000,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Series B - USD ($) | Jul. 02, 2018 | Apr. 02, 2018 | Jan. 02, 2018 | Oct. 02, 2017 | Jul. 03, 2017 | Apr. 03, 2017 |
Class of Stock [Line Items] | ||||||
Preferred stock dividends | $ 32,087 | $ 32,087 | $ 32,087 | $ 32,087 | $ 32,087 | |
Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock dividends | $ 32,087 |
Concentration (Details)
Concentration (Details) - Accounts Receivable - Credit Concentration Risk - debtor | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | ||
Number of debtors | 1 | 1 |
Concentration of risk | 10.80% | |
Hawthorne OTB | ||
Concentration Risk [Line Items] | ||
Concentration of risk | 13.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Aug. 07, 2018 | |
RW Services Pte Ltd [Member] | RWS License Agreement [Member] | |||
Related Party Transaction | |||
Related Party Transaction, Expenses from Transactions with Related Party | $ 400,000 | $ 627,000 | |
Moelis & Company LLC [Member] | Moelis Engagement Agreement [Member] | Subsequent Event | |||
Related Party Transaction | |||
Due to Related Parties | $ 100,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | Dec. 28, 2015 | Jun. 30, 2017 |
Casino Lease [Member] | ||
Loss Contingencies [Line Items] | ||
Operating Leases, Annual Rent, Percent of Gaming Revenue in Excess of $150,000,000 | 5.00% | |
Golf Course Lease [Member] | ||
Loss Contingencies [Line Items] | ||
Operating Leases, Annual Fixed Rent, Before Opening | $ 0 | |
Operating Leases, Annual Fixed Rent, First Ten Years | 150,000 | |
Operating Leases, Annual Fixed Rent, After Ten Years | $ 250,000 | |
EPT Concord II, LLC [Member] | Casino Lease [Member] | ||
Loss Contingencies [Line Items] | ||
Lessee Leasing Arrangements, Operating Leases, Notice To Terminate Lease | 12 months |
Commitments and Contingencies48
Commitments and Contingencies - Lease Payments (Details) - USD ($) | 6 Months Ended | 18 Months Ended | 460 Months Ended | |
Jun. 30, 2017 | Aug. 31, 2018 | Dec. 31, 2056 | Jun. 30, 2018 | |
Loss Contingencies [Line Items] | ||||
2,018 | $ 5,930,000 | |||
2,019 | 9,353,000 | |||
2,020 | 8,948,000 | |||
2,021 | 8,489,000 | |||
2,022 | 8,400,000 | |||
2023 to 2056 | 361,886,000 | |||
Total | 403,006,000 | |||
Casino Lease [Member] | ||||
Loss Contingencies [Line Items] | ||||
2,018 | 4,500,000 | |||
2,019 | 7,500,000 | |||
2,020 | 7,500,000 | |||
2,021 | 8,000,000 | |||
2,022 | 8,100,000 | |||
2023 to 2056 | 346,524,000 | |||
Golf Course Lease [Member] | ||||
Loss Contingencies [Line Items] | ||||
2,018 | 0 | |||
2,019 | 125,000 | |||
2,020 | 150,000 | |||
2,021 | 150,000 | |||
2,022 | 150,000 | |||
2023 to 2056 | 7,675,000 | |||
Operating Leases, Annual Fixed Rent, First Ten Years | $ 150,000 | |||
Operating Leases, Annual Fixed Rent, After Ten Years | 250,000 | |||
Operating Leases, Annual Fixed Rent, Before Opening | 0 | |||
Entertainment Village Lease [Member] | ||||
Loss Contingencies [Line Items] | ||||
2,018 | 12,000 | |||
2,019 | 150,000 | |||
2,020 | 150,000 | |||
2,021 | 150,000 | |||
2,022 | 150,000 | |||
2023 to 2056 | $ 7,713,000 | |||
Operating Leases, Annual Fixed Rent, First Ten Years | 150,000 | |||
Operating Leases, Annual Fixed Rent, After Ten Years | 250,000 | |||
Operating Leases, Annual Fixed Rent, Before Opening | $ 0 | |||
Scenario, Forecast [Member] | Casino Lease [Member] | ||||
Loss Contingencies [Line Items] | ||||
Operating Leases, Annual Fixed Rent | $ 1,000,000 | $ 7,500,000 | ||
Operating Leases, Annual Fixed Rent, Escalation Percent Increase Every Five Years | 8.00% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 23, 2018 | Jul. 09, 2018 | Jul. 05, 2018 | May 31, 2018 | Jan. 24, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Aug. 07, 2018 |
Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member] | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from Related Party Debt | $ 5,000 | $ 5,000 | |||||||
Commitment fee | $ 300 | ||||||||
Moelis & Company LLC [Member] | Moelis Engagement Agreement [Member] | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Due to Related Parties | $ 100 | ||||||||
Term Loan Facility, Term A Loan [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from issuance of debt | $ 9,000 | $ 0 | |||||||
Term Loan Facility, Term A Loan [Member] | Notes Payable to Banks [Member] | Montreign Operating [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from issuance of debt | $ 9,000 | ||||||||
Term Loan Facility, Term A Loan [Member] | Notes Payable to Banks [Member] | Montreign Operating [Member] | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Proceeds from issuance of debt | $ 53,000 | $ 8,000 | |||||||
Amount borrowed under line of credit | $ 70,000 | ||||||||
London Interbank Offered Rate (LIBOR) [Member] | Term Loan Facility, Term A Loan [Member] | Notes Payable to Banks [Member] | Montreign Operating [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Basis spread on variable rate | 5.00% |